Complex Made Simple

How digitally influenced are your shopping decisions?

Amid a boom in retail tech and a push for digital-driven decisions, human touchpoints based on emotion and customer experience are still crucial.

73 percent of consumers prefer the use of multiple channels to shop, according to a study of 46,000 shoppers A large number of consumers are called to action through AI-based product recommendations online In a world of increasing connectivity and personalization, consumers are becoming wary of sharing their data

The way people shop is evolving … and in turn, retailers are evolving, too! From markets to malls, to mobile phones, the way people browse through products, choose to engage with it and finalize a purchase has caused retailers to continuously reassess their strategies. 

According to a study of 46,000 shoppers published by the Harvard Business Review, 73 percent of consumers prefer the use of multiple channels to shop. This shows that in the midst of a boom in retail technology and a push for digital- and data-driven decisions, human touchpoints based on emotion and customer experience are still crucial. 

The fact that the customer comes first cannot be overemphasized. With the experience-focused generation of millennials driving both retail spending and high levels of smartphone penetration in the GCC region, it has now become equally important to positively engage with these consumers on their mobile devices as well as in brick-and-mortar stores. In fact, 73 percent of consumers claim that a positive experience is a key driver to determine brand loyalty. Customers are even willing to pay up to a 16 percent price premium for such experiences, a PwC study indicates.

Number of digital buyers in the Middle East and Africa from 2014 to 2019 (in millions)

Digital influence on customer experience

While on one hand, retailers have followed customer experiences by adapting to their changing behaviors, on the other hand, it's interesting to note how heavily consumers have been influenced by digital trends. The retail adoption of technology has revolutionized convenience and customer expectations. A Salesforce study shows that close to 87 percent of consumers begin their shopping experience with a digital search and close to 28 percent start shopping by browsing through the available choices on marketplaces such as Amazon.

People have become overly accustomed to the convenience of browsing through a bunch of options online, making secure payments online and having their products delivered to their doorstep. About 88 percent of consumers would pay more for same-day or faster delivery, a PwC report states, which corroborates with the findings of a BRP Consulting report that says that by the end of 2019, 65 percent of retailers will offer same-day delivery. 

The increasing popularity of e-commerce websites alongside a rise in retail stores has given consumers the best of both worlds. Data and technology have provided retailers with in-depth knowledge of their consumers, helping them target and market their products and services to meet their consumers' specific needs. A large number of consumers are called to action through AI-based product recommendations online. In fact, retailers are expected to spend close to $7.3 billion on AI by 2022, with the number of retailers using AI solutions jumping from 4 percent in 2018 to 28 percent in 2018, a Capgemini research study shows.


Source: Deloitte 2018 Holiday Survey

Personalization vs Security

Treading the path of an increased focus on customer experience has led retailers to customization and personalization. Meeting the general consumer demand is not good enough anymore; it's important to leave a lasting memory of a product or service that makes each customer feel unique and special. A recent Epsilon study sheds light on the fact that 80 percent of customers are more inclined to purchase from a brand that provides personalized experiences. Conversely, 88 percent of retailers have testified to the fact that personalization has made their marketing strategies more effective, a Salesforce study indicates. 

With the rapid growth of technology, personalization is soon going to become a necessity. Augmented reality is projected to be a $133 billion industry by 2021, according to a Zion Market Research report.

“Imagine being able to go to a furniture store, select five items using a QR code, and go to your home and actually place them within a 3D plan of your room … and then after taking a printout of that, being able to change the color of the couch and maybe even swap the couch for something else that the algorithm recommends,” said Shane Eldstrom, CEO of Reem Mall, about the potential impact of 5G on the retail experience.

However, in an IoT-dependent world of increasing connectivity, shared data, and high levels of personalization, consumers are also becoming overly wary of sharing their personal data. Given the chance, 87 percent of customers would demand that brands delete all their personal information, an Oracle report confirms. Yet, more than half the number of consumers (57 percent) have stated that they are comfortable sharing personal information that adds to their personal retail experiences, a Salesforce survey concludes.